Nu needs to commit to always providing liquidity for Park Rates to function, which today means using NuShare sales, and with Park Rates motivate NuBit sales for enough revenue to build sufficient reserves. Nu must in the time until parked NuBits are unparked have succeeded in its possibly adjusted operations for the interest rate not to choke liquidity.

Nu needs to commit to always providing liquidity for Park Rates to function, which today means using NuShare sales, and with Park Rates motivate NuBit sales for enough revenue to build sufficient reserves. Nu must in the time until parked NuBits are unparked have succeeded in its possibly adjusted operations for the interest rate not to choke liquidity.

Correct?

That’s the way I understand it. Effective parking requires a tight spread at the time of unparking in order for it to be worth it for people to park in the first place, or otherwise any interest rewards gained will be lost. The only way to guarantee a tight spread at this point is to sell NuShares. So selling NuShares, will give us more Bitcoin reserves, which can be put toward the buyside at a tight spread, encouiraging people to park again.

Do we need to hold an actual NuShare auction again like we’ve done in the past instead of selling everything on exchanges?

I can see that there’s a limit to how much demand there is for NuShares on the exchanges, though what about the BTC reserves and why are they not sufficient to be providing liquidity at this stage? Pretty much nothing is being offered buy side on poloniex. Why is that? Does it just get eaten up straight away? I don’t really know the details of what is going on, though it’s being drawn out for a long time now. Clearly nothing has worked so far.

I am surprised that instead of organising a blind auction for a sufficient number of nsr shares to restore liquidity, a lot of time of many capable people is spent on elaborate writings about who is responsible for absence of such. Come on guys, put the fire out first, shake the blame finger later if you must.

I might not understand the situation well enough, but it seems to me that no liquidity at all is worse than liquidity at wider spread. Please explain where I am wrong?

I am surprised that instead of organising a blind auction for a sufficient number of nsr shares to restore liquidity, a lot of time of many capable people is spent on elaborate writings about who is responsible for absence of such. Come on guys, put the fire out first, shake the blame finger later if you must.

People did what they believed to be a way to put the fire out, and now the finger of blame is being shaken.

backpacker:

I might not understand the situation well enough, but it seems to me that no liquidity at all is worse than liquidity at wider spread. Please explain where I am wrong?

We don’t (or didn’t) know the best course of action, and many involved with liquidity assumed maintaining the perception of a peg around $1.00 is important. It might have given us time to think.

While it is impossible to understand the motives of each buyer and seller in the market, my guess is that the choice to offer low liquidity has knocked 40% off the NuShare market cap. Any action that results in destroying 40% of the market cap when there are alternatives that wouldn’t do that is indeed incompetent and cannot be tolerated.

What are your motives, @JordanLee?
First you were advocating that an NSR buyback is a good way to incorporate the proceeds from NSR sale into the corporate value.
Now it looks it wasn’t that good of choice.
Brave decisions (leave @zoro alone, fire me - that’s what you are after, right?) allowed keeping the buyside at a rate of $0.95. Now you are calling those, who made the decisions incompetent, after based on all what we know this is the only reason we have BTC left to support the buyside at a degraded peg?
What have I done to be despised that much?
Kept the peg at $0.95? Well…
All it would have required was a motion, but you realized your motion that enforces a spread at below 1% isn’t about to pass?

The prime reason why Nu is in this situation is, because a motion you crafted passed:

While it is our long term goal to eliminate holding reserves at all, until we can guarantee a large amount of decentralised liquidity for a long period of time, some reserves are necessary. As I have mentioned recently, I hope others will step up and hold that reserve using multisig addresses. Notwithstanding our plans for improvement in the coming months, a temporary framework for managing tier 4 buy side liquidity is needed at the present time.
If the tier 4 buy side is too big, it increase…

Who profits from that motion?
Anyone who sold NSR back the at a high price and can buy back cheap now.

Do you want to have my guess for what happens to the NSR rate once the BTC are empty, because the spread has been tightened?
I bet no, but you will get it anyway: those who sold NSR during the buybacks will be able to buy NSR cheaply.

That requires, of course, that the Nu network will not die in the trouble. It will be a tightrope walk. If played well, clever actors can end with more NSR than before the buyback and still have BTC left.
Eureka!
The tightrope walk might fail, possibly ruining BCE as well. One can hope that BCE is able to pay for development with BKS or BKC and finds a replacement for NBT.

Regarding development - you we’re recently telling us that the Nu network looks like this, because it’s development without JordanLee

The motion to reduce the reserve through buybacks was your idea.
The motion to provide liquidity at tight spreads was your idea.
I didn’t follow. We still have BTC. Is that why I need to be sacrificed as incompetent liquidity provider?
Are you sure that you are infalliable?
Where is the data you put your claims on?

The experience of the last days with regard to liqudity provision showed that the buyside will be emptied the faster the tighter the spread.
And it showed that an increased spread (in our case asymmetrical) can keep the peg, albeit at a degraded level.
A lesson I’ve learned in January, but few want to listen.

I’m not incompetent with regards to liquidity.
My track record is awesome!
I kept the peg at Poloniex in January with ALP failing through the NuBot gateways I invented in November last year.
I am one of the important reasons why the last BTC were not dumped on NuLagoon Tube and are still supporting the peg at $0.95.

Don't you sense the tragedy in it? If the price drops, we should have sold all BTC, but won't be in the position to do so. On the contrary - we will receive even more BTC that are worth less the more BTC drops. If the price rises more, NuLagoon Tube funds will be emptied in the blink of an eye, leaving us empty-handed. We are always in a bad position. The BTC might be better used for keeping gateways funded until there's a little less volatility at BTC. When? This is pretty much all that…

You can’t support a peg with no BTC. T5 and T6 aren’t capable of supporting T1 with sufficient funds in the current situation.

Go on and try to convince the shareholders to have the spread tightened and see what it gets you - cheap NSR?
Better fire me for that than for implied incompetence.
I’m one of those who knows how liquidity provision at Nu works!

First you were advocating that an NSR buyback is a good way to incorporate the proceeds from NSR sale into the corporate value.Now it looks it wasn’t that good of choice.

It was a good choice. People aren’t buying NSR because 10 days ago the network got out of the stable currency business. It is my contention that this was a completely unauthorised action taken by a few individuals and it doesn’t reflect the will or interests of shareholders. To get things moving in the right direction, shareholders must make very clear that we are in the stable currency business and that those few individuals who acted otherwise were not authorised to do so and do not enjoy the support of shareholders.

@masterOfDisaster where is your authorisation to abandon the peg? What you are doing is unsupported by all of our motions.

You can’t support a peg with no BTC. T5 and T6 aren’t capable of supporting T1 with sufficient funds in the current situation.

You and those who have acted with you have nearly completely destroyed the utility of tier 5 (as Sentinelrv explained very well above) and severely impaired tier 6. Nobody wants a variably pegged stable currency. So under the approach to liquidity you advocate the prospect of NuBit sales in the future are bleak, hence NuShares are not worth what they used to be.

This is the point: what you have done destroys demand for NuBits, it destroys tier 5 and dramatically reduces the utility of tier 6. It was not the plan approved by shareholders. Our best chance is to repudiate and reject what you have done these last ten days as loudly and forcefully as we can, in hopes that doing so will revive demand for NuBits, make park rates function again, and NSR something that can go up later as a result of increased NuBit demand.

This is what I would like to call “fragmenting the network”, which is to blame individuals for actions that have not broken motion. Which motions were broken by which community members? Please come forward with precise accusations of misconduct or guide the community as a whole using motions. Do not fragment the network by laying general accusations against no one in particular outside of any framework of motion.